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Analysis

10 Years of Super PACs Show Courts Were Wrong on Corruption Risks

It’s been a decade since the Supreme Court’s Citizens United ruling led to a lower court decision that created the super-PAC monster that gives the wealthy undue influence over politics.

March 25, 2020

Congress is on the brink of passing the biggest stim­u­lus bill in history. The last time there was legis­la­tion like this, super PACs didn’t exist. Today, the campaign finance regu­la­tion system is in far worse shape, and wealthy donors can use their influ­ence to try to obtain big payouts from the govern­ment.

Mean­while, the influ­ence of unlim­ited big money has already been affect­ing the 2020 elec­tion. The evid­ence is every­where from one donor spend­ing nearly $15 million through a super PAC back­ing one primary candid­ates to the pres­id­en­tial contenders arguing at a debate about accept­ing money from wealthy support­ers through super PACs.

The law limits the amount one indi­vidual can donate directly to a campaign, in part because of fears that that type of trans­ac­tion could lead to corrup­tion. But wealthy donors are still able to exert immense influ­ence over our polit­ical process, thanks in part to a federal appeals court decision 10 years ago this month that was based on the Supreme Court’s Citizens United ruling.

In Speech­Now v. Federal Elec­tion Commis­sion, the DC Circuit Court of Appeals required the FEC to allow organ­iz­a­tions to register as “inde­pend­ent expendit­ure only commit­tees,” a status that lets groups raise unlim­ited money from donors. Million­aires, billion­aires, and corpor­a­tions skirt indi­vidual limits by donat­ing to these groups, which we now know as super PACs.

The groups — which are often staffed by former employ­ees of the candid­ates — throw their money and resources behind candid­ates or polit­ical causes favored by the wealthy donors. The process drowns out the voices of regu­lar voters, giving the super­rich a level of access to and influ­ence over the polit­ical process that’s impossible for the vast major­ity of Amer­ic­ans to obtain. Examples abound over the last decade.

The most recent high-profile one involves Lev Parnas and Igor Fruman, two Ukrain­ian-Amer­ican busi­ness­men who used large contri­bu­tions to a pro-Trump super PAC to get face­time with the pres­id­ent. They took the oppor­tun­ity to advoc­ate for the ouster of the U.S. ambas­sador to Ukraine, Marie Yovan­ovitch, a move they viewed as bene­fit­ing their own interests and those of another Ukrain­ian govern­ment offi­cial.

Or there’s the case of Jose Susumo Azano Matsura, a Mexican busi­ness­man inter­ested in build­ing a water­front devel­op­ment in San Diego. He was convicted in 2016 of funnel­ing $500,000 in illegal foreign money into a San Diego mayoral race to gain support for the project, using a shell company and super PAC to disguise the foreign source of much of the funds.

Real estate was also a factor one year later on the east coast, when former Miami Beach Commis­sioner Michael Grieco pleaded no contest to charges result­ing from a scheme that involved secretly setting up his own super PAC and accept­ing disguised dona­tions from a Norwe­gian citizen inter­ested in devel­op­ing prop­er­ties in the city.

And just this month, North Caro­lina insur­ance magnate Greg Lind­berg was convicted of attempt­ing to bribe the state insur­ance commis­sioner to replace an offi­cial who was invest­ig­at­ing a company Lind­berg owned. The lion’s share of the payments — $1.5 million — went through a super PAC Lind­berg had created for the purpose. He was caught on tape explain­ing how his dona­tions to a super PAC would bene­fit the insur­ance commis­sion­er’s campaign.

There are also cases where the influ­ence of super PAC money was not outright illegal but has an appear­ance of corrup­tion nonethe­less.

When Congress was consid­er­ing an unpop­u­lar tax reform pack­age in 2017, Cory Bliss — the head of the Congres­sional Lead­er­ship Fund and close ally of House Speaker Paul Ryan — gave House Repub­lic­ans an ulti­matum: the group would not support members who voted against the bill. As the tax reform moved through Congress, senat­ors and repres­ent­at­ives were frank about their motiv­a­tion to pass it to please donors. The Congres­sional Lead­er­ship Fund went on to be the highest-spend­ing super PAC in 2018, shelling out $138 million in support of GOP candid­ates.

And in Wash­ing­ton, DC, support­ers of Mayor Muriel Bowser were forced to shut down their super PAC when scan­dal erup­ted over big contri­bu­tions from donors seek­ing busi­ness contracts with the district. One donor described giving to the super PAC this way: “If you want to continue to have good favor with the mayor, it is some­thing you do.”

Just 11 donors have given $1 billion to super PACs over the years, and more than two-thirds of super PAC fund­ing comes from dona­tions of $1 million or more. Super PAC spend­ing has sharply risen from $600 million in 2012 to over $1 billion in 2016.

Fortu­nately, power­ful reform options are avail­able. The key is public finan­cing, which empowers regu­lar people and the candid­ates they support to run compet­it­ive campaigns without seek­ing super PAC help. These programs match and multiply small dona­tions with public funds, so that $50 from a constitu­ent becomes worth $350 to the candid­ate, for example. The idea is not to elim­in­ate big super PAC money, but to give candid­ates not suppor­ted by wealthy donors the resources to compete for office.

Public finan­cing has seen success in several cities, from Los Angeles to New York City, where candid­ates raise most of their funds from small donors. The programs improve the connec­tion between repres­ent­at­ive and constitu­ent by reward­ing retail fundrais­ing in the community rather than ritzy fundraisers and wink-and-nod arrange­ments with super PACs. Several cities and counties have created public finan­cing systems in response to Citizens United. A bill has also passed the House of Repres­ent­at­ives. With every legis­lat­ive advance, this reform can help our elec­tions change course after a decade of super PACs.